Susser Opens Record Number of Stripes Stores
CORPUS CHRISTI, Texas -- Susser Holdings Corp. opened a record number of new stores in its 2012 third quarter, and the convenience store operator said it will continue to aggressively open new large-format stores.
According to Susser Holdings CEO Sam L. Susser, the company opened eight new Stripes stores in its latest quarter, for a total of 552 stores as of Sept. 30. The eight stores is a record for Susser Holdings in any one quarter.
Fourteen more Stripes stores are currently under construction. Ten or 11 of those could open in the fourth quarter of this year. Another 25 to 30 stores are scheduled to open in 2013, the chief executive added.
Susser Holdings is bullish on new store openings because of the success at its current stores and a favorable economy in its home state of Texas. Housing starts are strong in the Lone Star State and unemployment stands at just 6.8 percent, well below the national average, Susser stated.
As for the success at its current locations, Susser Holdings reported that same-store merchandise sales rose 5.8 percent in its 2012 third quarter, compared to the same period last year. Merchandise margins improved to 33.8 percent, vs. 33.6 percent a year earlier.
Sales at its company-owned Laredo Taco Co. quick-service restaurants, located in 342 Stripes locations, were also robust. In addition, Susser said snack and beer sales were especially strong, with consumers shifting to premium and imported libations in this latest quarter.
The one bugaboo was cigarette profits, according to the CEO. "They made up 7.7 percent of our merchandise gross profit in the latest quarter. Last year [during the same quarter], they were 8.8 percent.
However, Susser noted that Stripes stores are seeing a trend toward customers purchasing more smokeless tobacco products. "That's a strong trend for our business," he said. Overall, Susser Holdings earned $6.8 million in its 2012 Q3, vs. $18.5 million in last year’s Q3. A one-time charge related to the company’s just-completed initial public offering (IPO) of Susser Petroleum Partners LP and lower retail fuel margins were cited as reasons for the net income decline.
As for Susser Petroleum Partners, 109 million units of the wholesale motor fuels distributor sold at $20.50 per unit during the IPO. Susser Holdings retains 50.1 percent of Susser Petroleum Partners, which serves all 552 Stripes convenience stores, 484 independent dealers and approximately 1,300 commercial customers.
"Susser Holdings and Susser Petroleum Partners maintain a very strong relationship," Susser asserted, noting that Susser Petroleum Partners has the option to acquire 15 current Stripes locations in the next 12 months. "We could 'drop down' one or two stores into [Susser Petroleum Partners] by the end of the month," he said.
Susser Holdings and Susser Petroleum Partners will also consider making joint c-store acquisitions in the future.